CEBU CITY, Philippines – It’s that time of year again when the 13th-month pay is about to be released. But, do you know how it is calculated?
Employees often need clarification to compute this additional compensation. With the holiday season fast approaching, understanding how to calculate your 13th-month pay has never been more important.
With this, the Department of Labor and Employment (DOLE) released a guideline on Friday, November 10, 2023, on the proper computation of 13th-month pay.
READ MORE: What will you do with your 13th-month pay?
But first, know if you are eligible to receive a 13th-month pay?
Who is eligible to receive the 13-month pay?
According to the latest guidelines, rank-and-file employees in the private sector—regardless of position, employment status, and salary payment method—are entitled to the 13th-month pay, as long as they’ve worked for at least one month during the calendar year.
This means you can expect to receive this monetary benefit even if you’re still a probationary employee working for at least one month for your current employer.
Rank-and-file employees are the ordinary members of an organization or the ordinary workers in a company. Those who are not managerial employees or supervisory employees.
How to compute the 13th-month pay?
The minimum 13th-month pay required by law shall not be less than one-twelfth (1/12) of the total basic salary earned by an employee within a calendar year.
Here is the formula for calculating the 13th-month pay based on the DOLE guideline.
For regular employees:
13th Month Pay = Total Basic Salary Earned During the Year ÷ 12
Where the total basic salary includes all salary components received by the employee, including regular allowances and other monetary benefits.
However, it excludes reimbursements, overtime pay, and any nonmonetary benefits, such as food, lodging, and transportation allowances.
While the 12 represents the 12 months in a year.
For probationary employees:
If an employee is on probationary status and has not completed a full year of service, the pro-rated formula for computing the 13th-month pay is:
13th Month Pay = (Total Basic Salary Earned During the Probationary Period ÷ 12) x Number of Months Actually Rendered
Where, the total basic salary earned during the probationary period includes all salary components received by the employee, including regular allowances and other monetary benefits.
However, it excludes reimbursements, overtime pay, and any nonmonetary benefits, such as food, lodging, and transportation allowances.
The 12 represents the 12 months in a year. While the number of months actually rendered is the number of months the employee has worked during the probationary period.
Why are government employees not eligible for this benefit?
Government employees are not eligible for the 13th-month pay law. However, they can receive other monetary benefits like a 14th-month pay and mid-year and year-end bonuses.
The 14th-month pay is up to the discretion of government agencies while the bonuses are given based on the employee’s tenure and performance.
Moreover, the minimum amount shall be given without prejudice to existing company practice or policy, employment contract, or collective bargaining agreement (CBA), if any.
Employers shall pay on or before December 24, 2023. No request or application for exemption or deferment of the payment of 13th-month pay will be considered or approved.
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/bmjo